Updates About Budget

A new study from the Citizens Research Council of Michigan shows that the recent federal changes made to the Supplemental Nutrition Assistance Program (SNAP) have contributed to an 8% decline in the number of Michigan residents receiving benefits.

During fiscal year 2025, approximately 1.5 million Michigan residents received SNAP benefits. A total of $3.1 billion was distributed, with an average benefit of $175 per month. By April 2026, roughly 1.37 million Michiganders were receiving SNAP benefits.

The federal changes, which include new eligibility restrictions and further work requirements for certain groups, are the primary reasons for the decrease. The changes included applying work requirements to adults ages 55 and older and removing exemptions for certain individuals experiencing homelessness, veterans, and young adults who previously aged out of foster care.

Michigan’s 8% decline was smaller than the national average decline of 12% during the same period. The Citizens Research Council estimates that the changes have reduced SNAP benefits in Michigan by approximately $300 million annually. The study noted that declining enrollment could increase state healthcare spending while also negatively affecting educational outcomes due to increased food insecurity. State officials are expected to consider how to address the funding gap created by federal cuts.

After a lengthy session day that took place over the course of 30 hours, the Michigan legislature passed a budget for the 2026-2027 (FY 27) Fiscal Year on July 3. Following the passage, significant questions have emerged about the overall spending total of the budget. On paper, the FY 27 budget totals $75.2 billion. However, the budget authorizes $86.4 billion in spending after federal Medicaid taxes and federal K-12 appropriations were shifted into boilerplate and not included in the topline.

The budget reduces Medicaid appropriations by approximately $479.2 million, ($185 million GF/GP), mostly coming from pharmaceutical program restructuring. About $87 million in savings was assumed by using restricted funds, instead of general fund dollars for certain programs.

Much of the 30 hour marathon session was spent voting on legislation unrelated to the budget, likely part of negotiations with fellow lawmakers ahead of campaign season. Before concluding with the budget bills, the Legislature first passed 66 policy bills that were largely uncontroversial. Highlights include establishing a two-year lobbying ban for certain former elected officials and department heads (HB 4062, 4063 and HB 4064), a bill prohibiting large corporate entities who already own 100+ Michigan homes from purchasing more (HB 6074), and legislation requiring Michigan Medicaid to cover evidence-based group prenatal care services (SB 415).

A full list of the legislation passed alongside the FY 27 budget can be viewed here.

After a slight delay in finalizing budget targets, a recent late night negotiation session has resulted in a framework agreement for the 2026-2027 (FY 27) fiscal year.

With broad targets reached, lawmakers remained in Lansing through the weekend to continue their negotiations. Latest reports indicate negotiations are moving along in department funding but have not yet reached funding for Legislatively Directed Spending Items (LDSIs). In total, lawmakers have requisition over $4.3 billion in these special projects. Under a law passed last November, all LDSIs must now be made public at least 45 days before the budget is approved by the Legislature. Due to this new law, any requests submitted after May 18 cannot be included if the budget passes by July 1.

The budget is expected to be smaller than last year’s and will reportedly not include new revenue streams or tax increases, meaning spending cuts are likely in some areas. Though Speaker Hall has made property tax cuts a top priority, indications show it is unlikely to be packaged in with the budget.

Another item that could be negotiated as the budget moves along are the House or Senate version of medical debt relief bills. Both chambers introduced identical legislation, HB 5254 and HB 5255, equivalent to SB 701 and SB 702 would cap the maximum interest rate on medical debt and prohibit wage garnishment or home foreclosure due to medical debt.

While many were hopeful that the budget would be done by July 1, it is becoming more likely that we will see a completed around July 3, just ahead of Independence Day weekend.